(Repeat for additional subscribers)
April 7 (The following statement was released by the rating agency)
Fitch Ratings says in a new report that the average
sovereign ratings of energy exporters and importers in the Middle East and North
Africa (MENA) have further diverged in 2014, following the upgrade of Saudi
Arabia (to AA).
Credit fundamentals across the energy exporters are expected to remain strong,
driven by triple digit oil prices. Fitch forecasts that Brent crude will average
USD105/b in 2014 and USD100/b in 2015. As a result, all energy exporters are
expected to record external surpluses and all except Bahrain ('BBB') are
forecast to post fiscal surpluses in both years. Non-oil economic growth is
forecast to pick up across the region, with the gains most pronounced in Qatar
Fitch assumes that economic performance should improve in most energy importers
in 2014 due to greater external financial support, a recovering euro zone and,
in some cases, improved political stability. Nonetheless, the energy importers
face significant challenges, from raising growth to levels that will lower
unemployment through to implementing fiscal consolidation in a volatile
political environment. These pressures are reflected in the Negative Outlooks
for both Lebanon (B) and Tunisia (BB-) and in Egypt's rating being the lowest in
the region at 'B-'/Stable.
Israel (A) is the only sovereign in the region with a Positive Outlook. Fiscal
consolidation during 2013 kept the debt/GDP ratio on a downward trend and
further measures are set to narrow the budget deficit in 2014. Despite the
fiscal consolidation, and exchange rate strength toughening the environment for
exporters, economic growth is forecast to remain over 3%.
The ratings of MENA energy importers range from 'BBB-' (Morocco) to 'B-'
(Egypt). Energy exporters' ratings range from 'BBB' in Bahrain to 'AA' in Abu
Dhabi, Kuwait and Saudi Arabia.
The report, "MENA Sovereign Credit Overview", is available on
www.fitchratings.com or by clicking on the link below.
Link to Fitch Ratings' Report: MENA Sovereign Credit Overview - April 2014